Opinion Mandates Law Is Sound Public Policy
The rising cost of health care is a bitter pill for employers to swallow. Most want to offer their employees insurance coverage, but double-digit premium increases, brought on by increased medical and pharmaceutical costs, greater utilization, and new government mandates, have left employers wanting more flexibility in benefit design.
Recognizing one size does not fit all, health plans have responded. Although no single solution offers a panacea, recent products provide improved tools to manage premium costs. Despite their differences, each maintains the key elements of a health plan, including use of networks and coordination of care, and seeks to address the same goals: to provide greater choice and encourage people to think about the cost of care.
One example includes offerings that give employers the ability to choose the composition of the provider network to determine the most appropriate form of coverage. Available products range from networks of select physician practices and hospitals in a defined region of the state to those consisting of providers in a broader geographic area.
Health plans have also begun offering varied copayment levels depending upon the type of provider and place of service, enabling employers to continue to offer coverage without restricting access to providers. This encourages members to look at the cost of medical services and where they receive care to align those choices appropriately. This is similar to three-tier pharmacy benefits, which demonstrated that you can maintain quality while involving consumers in understanding cost differentials.
Adjusting the premium contribution presents another option. By sharing more of the cost with their workforce, employers can achieve some predictability in rates and encourage employees to make more informed decisions when choosing their health coverage. Other products include a type of defined contribution plan that caps the employer’s annual premium contributions, and the use of deductibles to make consumers more sensitive to the true cost of health care.
In each instance, the use of information technology (IT) plays an essential role to help employers determine the right benefit design for them and their employees. Care management programs, a staple of managed care, present a clear example of how health plans leverage IT to provide more options. By identifying members who have chronic conditions that require long-term care, including diabetes, hypertension, and congestive heart failure, health plans develop and monitor customized care management approaches that improve members’ health.
These products have come about because Massachusetts medical costs are the nation’s highest, and health insurance typically is the second or third largest employer expense. Despite a sluggish economy and premium increases, employer-sponsored health insurance covers more than 80{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} of Massachusetts residents under the age of 65. Last November, the state’s Division of Health Care Finance and Policy surveyed 1,100 businesses and found that 69{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} of respondents provide coverage to their employees. Of the 31{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} that said they did not, more than half stated that they would be unlikely to provide coverage in the next three years. The top reason: cost. However, nearly 75{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} of those employers said that lower premiums would make it likely or somewhat likely for them to provide coverage. So the will is there, but can Massachusetts provide a way to help employers control costs?
Cost control is a critical component for preserving health care coverage and will require better management of drug utilization and purchasing, vigorous
fraud and abuse initiatives, and increased collaboration within health care to be successful. While health plans are doing what they can to control costs, one
factor they cannot control is mandated benefits. Mandated benefits remove the flexibility employers need to manage their premium costs. It is estimated that state and federal mandates account for 15 cents of every new health care dollar.
Recently, Massachusetts enacted a law requiring an analysis of the medical efficacy and cost of proposed mandates. The new law is sound public policy and will provide a more complete picture of the effect new mandates have on the quality and affordability of coverage.
This is a critical time in health care. Massachusetts health plans add significant value to the health care system. They have been working to make coverage more affordable, but finding solutions will require participation of all stakeholders, not one or two groups working alone.
Dr. Marylou Buyse is president of the Massachusetts Association of Health Plans and a practicing physician
